Latest / What the Flux / Temple & Webster's furniture fortune | Ampol's billion dollar pump-up | Bonds undies has an uncertain future

Transcript

Temple & Webster's furniture fortune | Ampol's billion dollar pump-up | Bonds undies has an uncertain future · What the Flux

• 0:05
  Speaker 1: This is what the Flux.
• 0:06
  Speaker 2: I'm Brettan, I'm justin and it's Monday, the eighteenth of
• 0:09
  Speaker 2: August Josey Boy.
• 0:10
  Speaker 1: According to the ABS, the average Australian full time worker
• 0:13
  Speaker 1: is now earning more than two thousand bucks a week
• 0:15
  Speaker 1: and that is for the first time in history. And
• 0:17
  Speaker 1: when broken down by states, the ACT recorded the highest
• 0:20
  Speaker 1: average full time weekly earnings, followed by WA But of
• 0:24
  Speaker 1: course this is the average, so some very big salaries
• 0:27
  Speaker 1: can blow this number out of the water.
• 0:29
  Speaker 2: Flex Ammer. We love talking about different companies and business
• 0:32
  Speaker 2: news every single week on the pod, but we have
• 0:34
  Speaker 2: an even deeper diet in the Fox Academy this month.
• 0:37
  Speaker 2: It's called Building a Business Brain and it helps cover
• 0:39
  Speaker 2: all the terms you need to know are working in
• 0:41
  Speaker 2: a business, from profits to margins to assets and this
• 0:44
  Speaker 2: is the ultimate guide how to assess companies and how
• 0:47
  Speaker 2: to invest in companies. May shure to download the Flux
• 0:49
  Speaker 2: app and check out the Academy this month.
• 0:51
  Speaker 1: Three revolutionary stories today jus Boy, Let's do it for
• 0:54
  Speaker 1: our first temple and Webster is writing the Home Improvement
• 0:58
  Speaker 1: Boom after it experienced a six times profit jump and
• 1:01
  Speaker 1: vestors reclined into the good news.
• 1:04
  Speaker 2: Sounds very impressive, be Man. But a little bit of
• 1:05
  Speaker 2: a spoiler. We're still not talking big profit numbers, so
• 1:08
  Speaker 2: tell me what so.
• 1:09
  Speaker 1: Temple and Webster was founded in twenty eleven and was
• 1:11
  Speaker 1: actually named after two Australians named William Temple and John Webster.
• 1:16
  Speaker 2: In eighteen twenty, these two blokes were commissioned by the
• 1:18
  Speaker 2: Australian Governor to make two large ornamental chairs.
• 1:22
  Speaker 1: And two hundred years later they have an ASX listed
• 1:24
  Speaker 1: company named after them and.
• 1:26
  Speaker 2: B Man, Temple and Webster's grown to become Australia's largest
• 1:29
  Speaker 2: online only furniture and a home wors retailer.
• 1:31
  Speaker 1: Well, Temple and Webster went through some testing times in
• 1:34
  Speaker 1: the mid twenty tens. They've had a major blow up
• 1:36
  Speaker 1: in the twenty twenties.
• 1:37
  Speaker 2: Yep, and it keeps going because it's revenue rose twenty
• 1:40
  Speaker 2: one percent to six hundred and one million dollars for
• 1:43
  Speaker 2: the year ending June thirty.
• 1:44
  Speaker 1: And even better, it's net profit jumped sixfold, from one
• 1:47
  Speaker 1: point eight mil to eleven point three mil.
• 1:49
  Speaker 2: Be Man. The standout was the home improvement category.
• 1:53
  Speaker 1: I'd be thinking ceiling fans, tapware, vanities.
• 1:56
  Speaker 2: Because apparently when consumer sentiment picks up, people start up
• 2:00
  Speaker 2: creating tap mixes.
• 2:01
  Speaker 1: Because Temple and Webster reckons that consumer sentiment has turned
• 2:05
  Speaker 1: the tide, and.
• 2:06
  Speaker 2: After those cash rate cuts, Australians a feeling flush enough
• 2:09
  Speaker 2: to shush up their homes.
• 2:10
  Speaker 1: So what is the key learning here?
• 2:12
  Speaker 2: The wealth effect is the idea that when people feel wealthier,
• 2:14
  Speaker 2: they splash.
• 2:15
  Speaker 1: More cash, whether from rising property values, share portfolios, or
• 2:19
  Speaker 1: even lower interest rates.
• 2:20
  Speaker 2: In fact, be Man in Australia about eighty percent of
• 2:23
  Speaker 2: mortgages are on variable rates. Do that means when the
• 2:25
  Speaker 2: RBA cuts the cash rate, many Aussies are feeling richer.
• 2:29
  Speaker 1: Which can often filter into discretionary spending like homewares and furniture.
• 2:33
  Speaker 2: Or a new rug that you'll probably trip over in
• 2:35
  Speaker 2: the first week.
• 2:36
  Speaker 1: In fact, Jazzy Boy, a Reserve Bank of Australia, study
• 2:39
  Speaker 1: found that a ten percent increase in household wealth leads
• 2:41
  Speaker 1: to about a one point six percent rise in household consumption,
• 2:45
  Speaker 1: and a ten percent increase in stock market wealth boosts
• 2:48
  Speaker 1: consumption by around one point two percent, so be Man.
• 2:50
  Speaker 1: For retailers like Templar Webster, a period of lower rates
• 2:53
  Speaker 1: can create huge demand, which is what we're seeing right
• 2:55
  Speaker 1: now For our second story, am Pole, the petrol retailer,
• 2:59
  Speaker 1: has acquired Egg Petrol for one point one billion dollars
• 3:02
  Speaker 1: to pump up its petrol station empire, the great Australian
• 3:06
  Speaker 1: servo land crab. It's what everyone's talking about, So tell
• 3:09
  Speaker 1: me more, Jazzy boy.
• 3:10
  Speaker 2: Okay. So, Ampole, which is formerly called Caltex Australia, is
• 3:13
  Speaker 2: one of Australia's largest petrol and diesel retailers.
• 3:16
  Speaker 1: We're talking more than eighteen hundred Ampole branded service stations
• 3:20
  Speaker 1: across the nation, enough.
• 3:21
  Speaker 2: To keep almost half of Australia's sausage roll craving satisfied.
• 3:24
  Speaker 1: But now Ampole will acquire EG Group's five hundred strong
• 3:28
  Speaker 1: Australian service station portfolio for one point one billion dollars.
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  Speaker 2: That'll be roughly eight hundred million cash and three hundred
• 3:34
  Speaker 2: million shares.
• 3:35
  Speaker 1: Interestingly, Juzy boy, many of these EG service stations are
• 3:38
  Speaker 1: already called EG Ampole because Ampole is the exclusive fuel
• 3:42
  Speaker 1: supplier for EG in Australia.
• 3:44
  Speaker 2: But now instead of just being their petrol buddy, Ampole
• 3:47
  Speaker 2: is becoming the proud owner.
• 3:49
  Speaker 1: And here is l twist. Am Pole tried to buy
• 3:52
  Speaker 1: the same network of service stations Back in twenty nineteen
• 3:55
  Speaker 1: when Woolworths owned it.
• 3:56
  Speaker 2: Will he sold it to EG for one point seventy
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  Speaker 2: two five billion dollars and Ampole lost out.
• 4:01
  Speaker 1: Fast forward to twenty twenty five, and thanks to the
• 4:03
  Speaker 1: changing nature of the petrol industry, it's now getting it
• 4:05
  Speaker 1: for one point one bill.
• 4:07
  Speaker 2: Or six hundred and twenty five million, less that it
• 4:09
  Speaker 2: was sold for previously.
• 4:10
  Speaker 1: Talk about a discount at the pump.
• 4:12
  Speaker 2: So what is the key learning here?
• 4:14
  Speaker 1: Service stations are still valuable, but they're no longer valued
• 4:17
  Speaker 1: solely for petrol sales.
• 4:18
  Speaker 2: There about pies and coffees and impulse buys. You didn't
• 4:21
  Speaker 2: know you need it?
• 4:22
  Speaker 1: Yes, see Jazzi boy. With the adoption of more and
• 4:24
  Speaker 1: more electric vehicles and hybrids, it has started to chip
• 4:27
  Speaker 1: away at traditional fuel demand.
• 4:28
  Speaker 2: In Australia, electric vehicles made up twelve percent of all
• 4:31
  Speaker 2: new car sales in the first half of twenty twenty five,
• 4:34
  Speaker 2: according to the Electric Vehicle Council.
• 4:35
  Speaker 1: And that means there's a growing number of cars that
• 4:38
  Speaker 1: will need less petrol or no petrol at all.
• 4:41
  Speaker 2: So be man. Ampole's acquisition isn't just about owning more
• 4:44
  Speaker 2: pumps nop. It's about owning more high traffic locations that
• 4:47
  Speaker 2: can evolve with the changing transport and food habits. For
• 4:50
  Speaker 2: our third and final story, Guild and Activewear has snapped
• 4:54
  Speaker 2: up Haines Brands, the owner of Bonds and Sheridan, but
• 4:57
  Speaker 2: two point two billion US dollars.
• 4:59
  Speaker 1: The undies market is getting stitched together. Juzzy boy, tell
• 5:02
  Speaker 1: me more.
• 5:02
  Speaker 2: Okay, So, Guild and Activewear is the Canadian clothing giant.
• 5:05
  Speaker 2: It's best known for churning out basics like T shirts
• 5:08
  Speaker 2: and socks and sportswear.
• 5:10
  Speaker 1: In fact, the brand started in Montreal in nineteen eighty
• 5:12
  Speaker 1: four making children's clothes.
• 5:14
  Speaker 2: And now it makes more than seven hundred million garments
• 5:16
  Speaker 2: per year.
• 5:17
  Speaker 1: Now, last week, Gilden agreed to buy the US apparel
• 5:20
  Speaker 1: brand Haines Brands in a two point two billion dollar deal.
• 5:22
  Speaker 2: And the Man This cash and stock deal was at
• 5:24
  Speaker 2: a twenty four percent premium to Haines Brand's closing price
• 5:28
  Speaker 2: pre offer.
• 5:28
  Speaker 1: All right, now, tell me who is Haines Brands again.
• 5:31
  Speaker 2: Well, they're one of the global leaders in basics like socks,
• 5:33
  Speaker 2: in activewear and underwear.
• 5:35
  Speaker 1: And also owned the Champion brand until late last year.
• 5:38
  Speaker 2: And then Man might remind you that in Australia, Haines
• 5:40
  Speaker 2: Brands is also the owner of Bonds and Sheridan Burley
• 5:44
  Speaker 2: Bras and things.
• 5:45
  Speaker 1: Yep, the same bonds that had Robert Irwin in his jocks.
• 5:48
  Speaker 2: But Ben Man, as part of this deal Guild and
• 5:50
  Speaker 2: CEO said the Australian portfolio could end in a quote
• 5:53
  Speaker 2: sale or other transaction.
• 5:55
  Speaker 1: And I don't know about you, but that doesn't give
• 5:56
  Speaker 1: me great hope that will remain in the broader guilden
• 5:59
  Speaker 1: PORTFOLI in the future.
• 6:00
  Speaker 2: No, no, So tell me what is the key learning here?
• 6:02
  Speaker 1: When multi billion dollar merges happen, there are often ripple
• 6:05
  Speaker 1: effects felt thousands of kilometers away. When new owners takeover,
• 6:09
  Speaker 1: they reassess every single asset and this often means offloading
• 6:13
  Speaker 1: or shutting down underperforming our sets.
• 6:14
  Speaker 2: So be man. When the deal closes late this year
• 6:16
  Speaker 2: or early next year, you can bet that the Aussie
• 6:19
  Speaker 2: assets will be in the firing line. And this ate
• 6:21
  Speaker 2: the first group of companies to be in limbo following
• 6:23
  Speaker 2: a major global acquisition.
• 6:25
  Speaker 1: Well, how about your favorite network ten Ah, Yes.
• 6:28
  Speaker 2: It's owned by Paramount, which recently merged with Skydance.
• 6:31
  Speaker 1: They've been struggling so much that last year Paramount valued
• 6:34
  Speaker 1: their TV license at a big fat zero dollars, So
• 6:37
  Speaker 1: be man.
• 6:37
  Speaker 2: It's a reminder that global corporate decisions can often have
• 6:41
  Speaker 2: very real consequences at the local level. Blucks An, If
• 6:44
  Speaker 2: you want to build your business brain so you can
• 6:46
  Speaker 2: talk margins and cogs, there is only one place to
• 6:49
  Speaker 2: do it in bite sized chunks. It's in the Flux
• 6:51
  Speaker 2: app in our academy this month called build your Business Brain.
• 6:54
  Speaker 1: Thanks for listening and we'll see you on Wednesday.